Planning for retirement? 5 tips to help you retire in comfort

Planning for retirement? 5 tips to help you retire in comfort

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The time to start planning for retirement is now. The only people who are exempt are those who have 25 times their annual expenses saved, as they would already be ready to retire based upon their current savings as long as they do not inflate their lifestyles. Those who do not fall into this category should plan ahead. Here are five tips to help you get started if you're in that boat.

Start Now

If you want to have a good and comfortable retirement, living the lifestyle you want to live, then you need to start planning for retirement sooner rather than later. There's an old Chinese proverb that says that the best time to plant a tree is ten years ago and that the second best time is today.

If you've not yet started by getting a financial checkup with a group or financial planning firm, the time is now. It's a good idea to just see where you stand in regard to your overall financial health.

Plan for Taxes

There are quite a few ways that those who hope to retire can cut their tax bill. Using a tax-deferred retirement account is one way to cut your tax bill in the present and ensure more of your dollars actually go toward your financial goals.

If you expect to have a higher income in retirement, a Roth account might be a better option to cut down on your tax bill in the future.

Take Social Security Into Account

Some people have fears that Social Security will not be around much longer. This is not likely. It is, however, likely that there will have to be benefit cuts in the future if other adjustments are not made.

Figuring out when the best time to take benefits for your particular situation is imperative to make sure that you're able to retire as comfortably as possible. With all of this said, you do not want to rely on solely collecting social security in your retirement.

Consider Insurance and Annuities

Some whole life insurance policies can provide income in retirement. They are essentially long-term savings accounts that allow the insurance company to make investments on their policyholders' behalf.

Over time, this can add up to a nice sum that can be drawn upon during retirement. Annuities provide annual income for those who purchase them. A wealth management expert can help you navigate which of these options will work best.

Stay Invested

The longer your money stays invested, the longer it has time to compound. Compound interest has been called the eighth wonder of the world, and it can really add up. Even relatively small investments can grow to large sums over time, but the investments have to stay invested for the long haul.

You also want to make sure that you have a few different investments as well. Keep in mind that investments can be very risky, but they should be calculated risks. If you have made a few smart investments, you will likely be better off than just making one big investment.

Starting retirement planning is imperative. It is never too early to start planning for retirement. The longer you wait, the harder it will be to have the money you need to retire in comfort and for the lifestyle you want to have.

Those who follow these recommendations are more likely to enjoy a great retirement. While you might not be able to hit all of these mileposts, hitting some of them will be better than none. They can help you retire more comfortably.